Embassy Bomb Victims Call on High Court to Reinstate Punitive Damages

WASHINGTON (CN) — Emphasizing the U.S. military response to Sudan for having supported a pair of embassy bombings in Kenya and Tanzania, a lawyer for the victims argued Monday at the Supreme Court that punitive damages were appropriate.

“Sudan provided al-Qaida with a safe haven and vital material support enabling it to carry out the embassy bombings, killing 224 people and wounding thousands more,” Gibson, Dunn and Crutcher attorney Matthew McGill said at oral arguments this morning in Washington. “In response, President Clinton sent 13 cruise missiles into Khartoum. But to impose punitive damages, Sudan argues, somehow would violate principles of fundamental fairness embodied in the Landgraf presumption.”

The United States Embassy, left, and other damaged buildings in downtown Nairobi, Kenya, are shown on Aug. 8, 1998, the day after a terrorist bombing.  (AP Photo/Dave Caulkin, File)

The Supreme Court set what is known as Landgraf presumption in a 1994 case also involving USI Film Products. The ruling specifies that congressional intent must be clear if a law that raises the amount of damages a party might face for conduct is to apply retroactively.

McGill called it obvious that Congress sought retroactive application in 2008 when it made various changes to the Foreign Sovereign Immunities Act. Enacted in 1976, the law  includes a terrorist exception to the privilege that otherwise prevents foreign countries from being hauled into U.S. courts. With the 2008 FSIA amendments, Congress also opened so-called state sponsors of terrorism up to the possibility of punitive damages.

McGill emphasized Monday that this was just one way that lawmakers  have consistently expanded the scope of the terrorism exception.

This is especially true, McGill argued, given the steps Congress took after President George W. Bush initially vetoed the bill out of fear it would make Iraq liable for conduct that took place under Saddam Hussein.

Instead of making substantive changes to the law, Congress simply gave the president authority to grant a waiver to Iraq. McGill said this was a clear indication that Congress agreed with Bush’s assessment of how the law would operate.

Erica Ross, assistant to the U.S. solicitor general, backed up this position as well at oral arguments, noting Congress suggested retroactivity by making the changes in the 2008 amendments available to cases that were pending at the time they were enacted

The 1998 al-Qaida bombings of the U.S. Embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, left more than 200 people dead and another 4,000 injured.

Though the first group of government employees and their families sued Sudan over the bombings in 2001, the passage of the 2008 FSIA amendments prompted new claims from additional victims. In Washington, a federal judge ruled after a bench trial that al-Qaida “could not have carried out the 1998 bombings” but for Sudan’s critical support.

The judge ordered Sudan to pay more than $10 billion, but the D.C. Circuit later carved out some $4.3 billion in punitive damages from the award, holding it was unclear that Congress authorized retroactive application of the 2008 amendments.

Sudan’s attorney Christopher Curran with the firm White and Case urged the Supreme Court on Monday to affirm.

Landgraf tells us the notion of retroactive imposition of punitive damages is such a draconian step, it is against the basic principles going back centuries about fairness,” Curran said. “So before we attribute that intention to Congress, we’re going to ask Congress to say it pretty damn clearly.”

Curran also pointed out the 2008 amendments created a brand new cause of action, a change in law subject to the presumption in Landgraf. 

The justices had significantly more questions for Curran than for opposing counsel. Justice Neil Gorsuch wondered how Curran could separate the punitive damages portion of the statute as the only one that does not apply retroactively.

“If we agree that the cause of action is a new one and applies retroactively, and if we agree that compensatory damages apply retroactively, on what account does it make sense to speak of punitive damages not also applying retroactively, given that it’s authorized by the same statute?” Gorsuch asked.

Justice Ruth Bader Ginsburg probed the heart of the Landgraf presumption, which she said is based on the theory that people should not be held liable without knowing the full costs of their misconduct.

“There’s something strange about the whole discussion of retroactivity because the doctrine is supposed to be based on people having an opportunity to know what the law is and conform their conduct to it,” Ginsburg said. “Are you maintaining that Sudan might have withheld their aid to al-Qaida just to prevent exposure to punitive damages?”

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